Cities for the rich

A key part of the UK government spending review ended security of tenancy in public housing, capped the sums paid as housing benefits to individuals and families, yet permitted public housing authorities to charge higher, near private-market rents

by Rowland Atkinson

In my office I have a copy of a cartoon which, in six frames, shows the ebb and flow of affluent and poor-black households in US cities, changing places in the inner city and then in the suburbs.

Research on gentrification suggests that migration of this kind generates significant social costs, with tens, sometimes hundreds, of thousands of poorer households displaced by higher-income households and property investors. Because landlords and owners would tend to avoid poorer neighbourhoods, properties there offered a potentially higher dividend: investment could be used to bring prices in these areas into line with higher-priced areas.

This search for “gentrifiable” properties and “up-and-coming” neighbourhoods has been key to the search for property wealth by many private households in the US and UK over the past 20 years. Yet the budget announcements by the Cameron-Clegg (Conservative-Liberal) coalition government in June suggest that these patterns will be reinforced by cuts to housing assistance for private and public tenants. The images in my cartoon of the affluent moving to wherever suits them seem unproblematic, even emblematic of the kind of society the government seeks to promote – location-maximising constituencies of worker-homeowners and flexible tenants content to uproot themselves in search of work.

A year ago I attended a policy forum in Melbourne where Australian federal bank officials rationalised the low interest rate environment that had preceded the crash (yet to fully touch the Australian economy), arguing that these had benefited the macro-economy and the needs of “us” homeowners. In Australia, as in the US and UK, home ownership remains at just over two-thirds of households, so this “us” is not all-embracing. Nevertheless the ongoing self-identified role of many politicians and public bankers has been to keep things rolling for “us”. There are also those who want to join “us”, who want to get on the ladder of wealth creation. All three groups are critical to understanding the banking/housing crisis: asset values rose because state action and private finance were aligned to fulfil the desire of existing and prospective homeowners, even as that project became the basis for the current catastrophe.

As David Harvey (1) has argued, the crisis was underpinned by capitalism’s ongoing imperatives to expand. As labour and commodities were supplied more cheaply by countries such as China and India, continued expansion and profitability could only be generated by allowing consumers to become indebted over longer time periods, and deploying deals to “subprime” households in the US.

Collapse of the house of cards

This house of cards has collapsed. In the US and UK, the crisis in asset prices and credit availability has been recast by political leaders as the failure of the state, its collective provisions and fiscal cost. Instead of devising fiscally progressive measures targeted at private and corporate wealth, the cost of the crisis, we are told, must be borne by the public and state service dependent groups in particular. The result is the rolling-out of a familiar ideological project: public costs are unaffordable and private expansion prescribed as the remedy. This agenda will mean a radically altered social geography in UK cities.

The government’s actions seem to be informed by three perspectives:

l Public housing is a tarnished state project, so stigmatised in the public’s view that a reduction in its costs is both politically desirable and fiscally common sense. (It will be achieved by making conditions so difficult that people will not want to use such forms of state assistance.)

l Public housing has become a politicised opportunity to contain the mad, bad and sad in neighbourhoods that can be policed and monitored by a punitive and withered welfare regime, which sees those who apply for benefits as deviant from an included society.

l The concentration of economic losers and social stress in public housing creates risks (including criminality and anti-social behaviour) to the rest of society. Higher-income groups seek to avoid this by using private or largely segregated housing and schooling services to insulate themselves from contact with poorer households. (The dinner party test is useful in establishing these tactics; good schools are identified less through academic prospects and more by the “kind of children” that go there.)

This social, political and economic context has helped prepare public housing for the new government’s onslaught. Its first budget revealed plans that housing benefit paid to private and public landlords would be capped, while rents for public housing would also be moved closer to market rents. In August David Cameron announced that new tenants would lose the lifetime tenure they were granted in Mrs Thatcher’s era, to make the sector more “flexible”.

These plans bring us back to the low political status of public housing in the UK. The new interventions will not work. Projections by the charity Shelter and London councils highlight that many will be displaced. The proposals should be understood as the by-products of ideas and values shaped by affluent interests and lifestyles, including the personal biographies of policymakers who have little experience of external conditions or the impact of their proposals.

Households displaced

There will be changes because of government commitments to erode the security of public and private tenants. Many poor households will be displaced from high-cost neighbourhoods and, as Saskia Sassen (2) has recently argued, their departure will provide opportunities for an aspirational class who want homes at affordable prices in places that will be the new investment and gentrification hotspots.

Some commentators were annoyed at earlier government “plans” to create local social mix, decrying it as a form of gentrification, but this plan appears much more ambitious, and uses the crisis of capitalism as an opportunity to displace the poor, and middle income households, that will benefit investors. (Naomi Klein (3) sees this utilisation of social upheaval and economic reverses as an endemic feature of “disaster capitalism”.)

What is strange about the current debate is that many people on low and moderate incomes have internalised the logic of the cuts, attacking others as the illegitimate beneficiaries of excessive state expenditure. In housing, as in many other areas of budget cutting, such changes appear to be a race to the bottom of social insecurity and labour-market flexibility. This will permit a spatial switch as low-paid workers and benefit recipients are forced to make way for higher-income tenants in public and private rental accommodation, and for prospective house buyers to take advantage of sales of repossessed housing.

Cities like London will be for the rich; their more distant hinterlands will house the poor, desperate to take work on almost any conditions in lieu of the falling assurances of the state. If there is an argument that the private sector is unlikely to substitute for falls in public employment, there is surely another that such highly indebted and insecure households will make for abundant, cheap and flexible labour.

Anywhere likely to be safe from the coming onslaught of cuts, and the effects of a second economic downturn, is the domain of those in political authority: these elites remain well outside the sight of those areas that will be affected by the social catastrophe to come. Their friendship networks rarely include anyone with firsthand knowledge of life in poverty or touched by dislocation in search of work. Political life of the left or right has mostly failed to prevent the excesses of corporate-political agendas seeking lowered wages and social benefits. It has failed to reduce inequalities, to produce fairness and to offer safety from economic secondariness. The cuts promise generations of child neglect, criminal ambition instead of legitimate careers, anti-social behaviour, incivility and the death of personal fulfilment through work and community life.